The much ballyhooed and anticipated Bilski ruling was released from the high court today and the big loser was, at a glance, just Bilski and his hedging method. But an in-depth read of the 66-page ruling indicates that there is more at play - some good, some bad - for interested parties on both sides of the patent and software methods fence.
The 66 page ruling, penned by Justice Kennedy, is well worth perusing even for those who typically eschew legal documents.
In the Syllabus, Kennedy quotes Diamond v. Chakrabarty "In choosing such expansive terms... Congress plainly contemplated that the patent laws would be given wide scope" in order to ensure that "ingenuity should receive a liberal encouragement."
This introduction is revealing as to the patent-liberal perspective of those ruling in the majority and sets the stage for a ruling that doesn't seem to want to step on the toes of the U.S. patent system.
The second major point of the Syllabus crushed the CAFC's standard of invalidation of Bilski's patent on the basis of a machine or transformation standard. Kennedy clearly states, "The machine-or-transformation test is not the sole test for patent eligibility under §101." Kennedy goes on to mildly rebuke the lower court for strongly applying this standard. "In holding to the contrary, the Federal Circuit violated two principles of statutory interpretation."
Kennedy continues that the Courts, "should not read into the patent laws limitations and conditions which the legislature has not expressed" and that "[u]nless otherwise defined, ‘words will be interpreted as taking their ordinary, contemporary, common meaning."
Interesting too is that Kennedy also rejects Director Kappos' assertion that the Court read "§101's other three patentable categories as confining "process" to a machine or transformation." Kennedy specifies that the doctrine of noscitur a sociis (determining definition of a word through context) is "inapplicable here, for §100(b) already explicitly defines "process"..."
Ironically, it is not that Bilski's patent is invalid that the high court disputes, but rather ironically, that the method the lower court applied to reach that conclusion was flawed.
Kennedy ends the Syllabus by explaining that Bilski's patent is invalid because it is an abstract idea. So, to culminate months and months of waiting for a ruling that was anticipated to be ground-breaking one way or another, the 5-4 ruling was less than a small tremor and method and software patents live on for now.
For the many interested parties that have been closely watching and waiting, the impact of this ruling varies:
For Bilski, although he has no patent, he does have closure to his legal odyssey.
For the lower courts, they are left scratching their heads as to what standard to apply to legal challenges over method and software patents now that the high court has released a very conservative ruling in the last days of its current session.
For the anti-software/method patent faction, they must find another route to achieve their goal. The court spelled out that only legislative action modifying the patent act could bar method patents, so perhaps lobbying for patent reform on method patents will be the next move or finding a case more worthy of a judicial hard-line.
For the pro-software/method patent faction, they can sleep well tonight, but probably not for long. This ruling may well galvanize their opposition into intense lobbying for a legislative change.
Perhaps the high court is erring on the side of caution or perhaps the ruling is really meant not to be in favor of the patent office, but rather in favor of the patent system itself.
"It is important to emphasize that the Court today is not commenting on the patentability of any particular invention, let alone holding that any of the above-mentioned technologies from the Information Age should or should not receive patent protection. This Age puts the possibility of innovation in the hands of more people and raises new difficulties for the patent law. With ever more people trying to innovate and thus seeking patent protections for their inventions, the patent law faces a great challenge in striking the balance between protecting inventors and not granting monopolies over procedures that others would discover by independent, creative application of general principles. Nothing in this opinion should be read to take a position on where that balance ought to be struck."